Government and Governing

Greg Mankiw has a good Post detailing how the Bush Tax Cuts, though bad for the economy and artificially directing resources (remember Greg did not say that), are not the major culprit in the debacle of the Deficit; a spendthrift Congress and President made the magic negative numbers appear. Political maneuvers to assure Support was the real villain. The idea to be kept in mind on this Issue states that Defense Spending, itself, costs more in R&D for Weaponry, than does the actual occupation of Iraq and Afghanistan. I am a personal advocate of ending both activities.

Ritholtz provides a good Post, and access to an article by Alan Abelson. The real point of both pieces stands as the Economy looks good, but has not been a help to the vast majority of Americans. Good, high-paying Jobs continue to disappear, to be replaced with low-paying Service sector labor which does not pay the bills. Old-time Economists, or maybe only this tired Author, always found fault with an Economy which benefitted only a small segment of the Population. Certain Economists could possibly understand the Economy to greater degree, if they ran old-fashioned Standard of Living models, having first eliminated the top 10% of Income-Earners. I suspect they would find a loss of over 7% from American households during the later Bush era.

Dean Baker ties into the Washington Post over the issue of Social Security. He states correctly that a Social Security Fund deficit will not appear soon, if at all. I would state that Privatization of Social Security presents no Corrective of such a Deficit (if it appears: It is a tricky argument subject to many economic considerations–the Great Depression of 1929 was not supposed to happen). Privatization of Social Security can find success only through the massive influx of funds into the Markets, all based upon a finite number of resources and financial instruments; inciting a vast drift away from actual values of the later. The propensity of Market values to flux with wild swings increases drastically, and the withdrawal of funds for Social Security funding will bring rapid and stark Market contractions.

(I will attempt to get a link up on Work Station technology for Those interested. The Problem lies in I have lost all but Paper files, and All should know my disinclination to type.) lgl